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by Mike Caswell

The Canadian Investment Regulatory Organization has cited two former Scotia Securities Inc. employees for taking advantage of the firm's bonus system by entering dozens of improper transactions. CIRO claims that the pair entered preauthorized contributions for clients without proper instructions, and did so with their bonuses dependent in part on those entries. The pair falsified notes to state that the clients had approved the contributions, CIRO says.

The allegations are contained in a notice of hearing that CIRO released on May 24, 2024, and a settlement agreement that CIRO released on May 17, 2024. The cases target former Toronto-area employee Sabrina Antonia Baggs and former Halifax-area employee Neelgiri Chatterjee. Neither still works for Scotia, as the firm fired Mr. Chatterjee and accepted the resignation of Ms. Baggs.

The allegations against the pair centre around Scotia's bonus system. One of the ways that Scotia employees can contribute to their bonus is to set up a preauthorized contribution, or PAC, for a client. These are recurring payments that come out of a client's bank account and go into an investment account. Each PAC that an employee sets up creates internal credits known as "sales dollars" or "customer advice results."

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